Intel up on bullish outlook

BintiT. Harvey

Read-Rite Corp
rdrt
. could see its shares fall Tuesday morning after warning it won't meet analysts' expectations for earnings its it fiscal first quarter. The Milpitas, Calif.-based company, which makes components for disk drives, said late Monday it expects the shortfall as a result of "reduced shipments" in the last two weeks of the quarter, which ended Dec. 28. The company also said it expects charges for the quarter to exceed the $30 million previously estimated because of a faster transition to new technology. The company said it would report the quarter's results on Jan. 21. Analysts had been expecting earnings of 40 cents a share, according to a survey by First Call. Shares closed down 7/16 at 17 1/8 before the warning.

Intel Corp.
AAPL, +0.62%
may extend its gains Tuesday in anticipation of its fourth-quarter earnings report next week.The stock climbed on bullish comments from Loewenbaum & Co. Inc., as analyst Ashok Kumar said he expects an upside surprise in the fourth quarter. Kumar said Intel may report as much as 15 cents above Wall Street estimates due to stablilizing flash-memory prices and a rebound in gross margins. Flash memory, which competes with the more traditional erasable programmable read-only memory, is a technology used in digital cell phones and other products. The consensus estimate according to First Call is 90 cents a share. Kumar expects Intel to report 13 percent sequential revenue growth.Intel shares closed up 1 7/8 at 74 1/2.

Hewlett-Packard Co.
hwp
introduced a new line of low-cost PCs, the first using Intel Corp.'s
INTC, +1.49%
latest multimedia technology. The Pavilion 3260 includes Intel's 200-megahertz Pentium Processor with MMX and 32 megabytes of memory.Analysts say the new PC marks a more aggressive foray into the sub-$1,000 market for H-P, as the company is offering the machine for less than $800 without sacrificing power or technology. The 3260 model lists for $799, excluding a monitor.H-P will also offer the 8240, including a 233Mhz Pentium processor with MMX for $1.099,8260, including a 266MHz Pentium MMX processor for $1,699, and 8275, including a 300 MHz Pentium MMX chip for$1,999. Shares ended the session down 1/2 at 64 1/8.

Intel
AAPL, +0.62%
maintained its leadership of the global semiconductor manufacturers for the sixth consecutive year, according to market research firm Dataquest Inc.The firm said Intel sold $21.08 billion worth of chips, an increase of 18.6 percent from 1996 levels. NEC Corp.
nipny
of Japan placed second with sales of $10.66 billion for the year. NEC's sales rose only 2.2 percent, as a result of the weakening Japanese yen.Motorola Corp.
MSI, +1.63%
maintained its number three rank, with a 0.5 percent increase to sales of $8.12 billion. Texas Instruments Inc.
TXN, +1.93%
rose to number four, with sales of $7.66 billion, an 8.4 percent gain, despite plunging dynamic random access memory prices. Dataquest said the worldwide semiconductor market grew 5.5 percent in 1997. The report boosted shares of the chip makers, as Intel gained 1 7/8 to 74 1/2, Motorola closed up 1 3/8 at 59 1/2 and Texas Instruments added 1/2 to 48 3/8.However, NEC closed down 2 1/8 at 51 1/2 on continuing Asian economic concerns.

Shares of Sun Microsystems Inc.
SUNW, +3.85%
climbed 4.2 percent following a bullish article in Barron's. The article said Sun is prepared to rebound from the decline in its share price, citing its agreement with Intel to run its Solaris operating system on the upcoming Merced microprocessor. Sun shares closed up 1 3/4 at 43 1/4.

Storage technology company Ciprico Inc.
cpci
shed 2 percent after saying it will fall short of expectations for the fiscal first quarter. The company expects to earn 8 cents to 13 cents a share in the quarter, compared to Wall Street expectations of 18 cents a share and year-ago earnings of 21 cents. Ciprico said although it received record orders, most of the orders were placed at the end of the quarter, and the product mix was different than anticipated. Consequently, the company was unable to fill all customer orders within the quarter. Ciprico sees sales of $7.2 million to $7.7 million, compared to $8.6 million a year ago. Ciprico slid 1/4, closing at 11 1/2.

Motorola Corp.
MSI, +1.63%
will cooperate with German electronics manufacturer Siemens AG to develop chips in eastern Germany. Siemens said the two companies will begin pilot production of chips on 300mm wafers, an upcoming transition in the chip industry from the present 200mm wafer manufacturing, that will cut chipmaking costs by as much as 30 percent. The combination will allow Siemens to lower the costs of semiconductor development while helping the company reach its goal of leadership in the memory chip market. Analysts have said the current slump in memory prices will delay the transition to 300mm manufacturing to late 1998. Motorola closed up 1 3/8 at 59 1/2.

Advanced Micro Devices Inc.
AMD, +2.57%
edged lower after two analysts revised their ratings to "hold."Sutro & Co. analyst Gerald Fleming lowered his rating on the company to "hold" from "buy."Josephthal Lyon & Ross boosted its rating on the stock to "hold" from "sell."AMD shares closed unchanged at 19 5/16.

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